1. Field of the Invention
The present invention generally relates to the field of financial rebates for buyers and sellers of bulk energy. More particularly, the invention is concerned with a financial rebate program that provides a rebate to purchasers or sellers of energy such as electrical power and natural gas for a deviation from expected weather conditions.
2. Description of the Prior Art
Utilities often purchase or sell bulk energy. For example, an electric utility may need to purchase electrical power at certain times of the year and at other times, may have excess generating capacity and need to sell electrical power to other utilities. The same is true for natural gas utilities and also for other companies that may engage in the business of purchasing and selling bulk energy.
The size of the transactions involving bulk energy often place the sellers or buyers at substantial financial risk because of the lack of precision in weather forecasts. For example, a utility may buy a block of electrical power for a given winter month based on anticipated heating load. If the weather is warmer than normal, the utility may not need all of the power it purchased and may have to sell the excess power at a discount. This often represents a substantial and unavoidable financial risk. A financial risk is also presented if actual demand exceeds anticipated demand requiring the utility to purchase additional energy at a premium price. Similar risks also exist for deviations in other weather related parameters such as rainfall, water run-off, river flow rates, water temperature, snow fall and snow accumulation as they relate to hydro-electric power generators, for example.